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Discussion board Free Cash Flow to Equity (FCFE) Models Comment on the following: Financial Analysts most always keep financing cash flows separate from operating cash

Discussion board

Free Cash Flow to Equity (FCFE) Models

Comment on the following:

Financial Analysts most always keep financing cash flows separate from operating cash flows, for good reasons. However, the FCFE model mixes operating and financing cash flows to calculate FCFE. Therefore, it is inappropriate. The Free Cash Flow to the Firm (FCFF) metric is much better for a valuation analysis attempting to estimate intrinsic value.

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